Microsoft offers $7.5M for 666,624 IPv4 addresses

Microsoft has agreed to pay $ 7.5 million for the purchase of a block of IPv4 addresses bankruptcy 666,624 Canadian manufacturer of telecommunications equipment Nortel in a move that some see as a sign of the increasing value of IPv4 addresses.

Last week, Nortel filed a motion seeking approval for the sale of the Bankruptcy Court for the District of Delaware. If the deal is approved, Microsoft could take control of IPv4 addresses, now owned by Nortel, for about $ 11.25 each.

About 470,000 of the addresses are available for immediate use by Microsoft, while the rest will be released to the company at the end of the bankruptcy proceedings, according to court documents filed in connection with the proposed sale.

The news of the proposed deal comes just weeks after the Internet Corporation for Assigned Names and Numbers (ICANN) announced that it had delivered its last block of IPv4 addresses, and all remaining supplies of early regional records would end.

Some have speculated that a black market in IPv4 addresses how your supply begins to relax and more organizations are faced with the costs and risks involved in migrating to IPv6.

ICANN and the regional registries have noted that the remaining IPv4 addresses allocated to entities that demonstrate an immediate need for them.

The American Registry for Internet Numbers (ARIN) has enacted new rules that allow companies to anticipate their needs for leadership of only three months at a time instead of the previous period of one year.

Microsoft plans to buy Nortel’s entire block of IPv4 addresses in this environment has prompted a debate among members of the North American Network Operators NANOG).

Some posters on the mailing list of the group speculated that Microsoft would buy the directions for the purpose of resale at a later date. “You can only get it for free from ARIN if they can document an immediate demand,” said a poster on NANOG.

“It may not have an immediate demand, and are simply addresses storage for later use after ARIN exhaustion? Or maybe the hope of making a profit after its sale to another person,” said the cartel.

Others wondered how Microsoft could buy the address block when ARIN policy requires that the blocks will be returned by Nortel of a pool where others can use. A sign says the “receiving organization must demonstrate a justified need,” to get the blocks.

In a message to the NANOG, John Curran, ARIN’s CEO, seems to suggest that the organization would be willing to go to court to explain the policy of allocation of IPv4 addresses.

“ARIN been given the policy, and explain what is needed in different courts,” said Curran. He could not immediately be verified if the poster was in fact Curran.

Nortel filed for bankruptcy in January 2009. Since then the company has been selling assets in an attempt to try to raise money to pay creditors.

According to court documents, Nortel began trying to sell the IP numbers in late 2010 after it realized its potential value.

The court seemed to recognize the value of the IPv4 address when noted that the limited supply of IPv4 addresses provides an “opportunity to get value from the marketing of Internet Numbers, that opportunity will diminish over time as IPv6 addresses are more widely adopted. ”

Nortel has received applications from 80 potential buyers and signed confidentiality agreements with 14 of them as part of preliminary efforts to find a suitable purchaser.

The company received final bids from four buyers of January and settled on Microsoft’s bid in March, representing the highest and best offer court papers said.

Incite domain, a blog that covers the area of ​​domain names, said the $ 11.25 for the direction Microsoft is committed to pay more than you would expect to pay.

“Remember, there are no intellectual property or traffic associated with these addresses – they are only route numbers,” said Kevin Murphy, director of the blog.

Based on that price, the total value of all IPv4 address space is in excess of $ 48 million dollars, he said.

Microsoft did not immediately respond to a request for comment.